Silver Price Analysis: Bearish flag spotted, $26.30 holds the key for XAG/USD bulls

  • Silver continued with its struggle to break through a strong barrier near the $26.30-35 region.
  • A short-term ascending channel seemed to constitute the formation of a bearish flag pattern.
  • Bullish oscillators on hourly/daily charts warrant some caution for aggressive bearish traders.

Silver struggled to capitalize on its early uptick and witnessed a modest pullback from the vicinity of four-month tops, around the $26.30 region touched on Friday.

Looking at the technical picture, the recent bounce from the $23.80-75 region, or YTD lows stalled near a resistance marked by the top boundary of a short-term ascending channel. Given a sharp pullback from the key $30.00 psychological mark, the mentioned channel constitutes the formation of a bearish flag pattern.

The XAG/USD's inability to break through the pattern resistance and the subsequent pullback suggests that the near-term positive move might have run out of steam. That said, bullish technical indicators on hourly/daily charts warrant some caution before positioning for any meaningful near-term depreciating move.

Hence, any further pullback is likely to find decent support near the lower end of the channel, around the $25.20 region, which coincides with the very important 200-day SMA. This is closely followed by the key $25.00 psychological mark, which if broken decisively will confirm a breakdown and prompt some technical selling.

The XAG/USD might then turn vulnerable to weaken further below the $24.75-70 intermediate support and slide back towards challenging the $24.00 mark. Some follow-through selling will expose YTD lows, around the $23.80-75 region, below which the downward momentum could drag the white metal towards the $23.20 support zone.

On the flip side, any positive move back above the $26.00 mark might continue to confront stiff resistance near the $26.30-35 heavy supply zone. A convincing break through the channel barrier will negate any near-term negative bias and pave the way for a move towards the $27.00 mark en-route the next hurdle near the $27.65-70 area.

XAG/USD daily chart


Technical levels to watch


Today last price 25.79
Today Daily Change -0.17
Today Daily Change % -0.65
Today daily open 25.96
Daily SMA20 25.18
Daily SMA50 26.08
Daily SMA100 25.79
Daily SMA200 25.25
Previous Daily High 26.3
Previous Daily Low 25.75
Previous Weekly High 26.3
Previous Weekly Low 24.68
Previous Monthly High 27.08
Previous Monthly Low 23.78
Daily Fibonacci 38.2% 26.09
Daily Fibonacci 61.8% 25.96
Daily Pivot Point S1 25.71
Daily Pivot Point S2 25.45
Daily Pivot Point S3 25.16
Daily Pivot Point R1 26.26
Daily Pivot Point R2 26.56
Daily Pivot Point R3 26.81



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